Welcome to episode 286 of the Energy Talks podcast. I'm energy and climate journalist, Markham Hislop. As the volume of wind and solar grows on power grids around the world, more and better tools are required by grid operators to manage the increasing uncertainty and variability in electricity supply. Long duration storage technologies are one emerging tool. Technology analyst Conrad Nichols of ID TechX recently wrote a report about long duration energy storage, and I'm gonna ask him to explain it for us.
So welcome to the interview, Conrad.
Hi there. Thank you very much for having me today.
Well, you're joining us from London. And I I always enjoy, you know, ink Canada has a long association with, with England. Less now, maybe a little it's a little weaker than it used to be, but we were a colony. We have a lot of affection for the queen, the king now. Sorry.
I'm showing my age. But, so I always I always love to get English speakers, people who speak the Queen's English or the King's English on the on the show. So but we're gonna talk about something today that is very relevant, and we've done quite a number of interviews in the last, I'd say, 20 or 30 episodes of Energy Talks about the integration of wind and solar into modern power grids. And I keep coming back to this over one interview in particular, which is Gerhard Schlage, who's the chief technology officer at Hitachi Energy, because he really spelled it out. He said, look.
If you're we are moving to wind and solar because they're just so much, cheaper than the existing, you know, coal or or gas or, nuclear or whatever. He said, but you have they are not drop in replacements for the old techno generation technologies. You have to modernize your grid. You have to change how you do things, and power electronics and and digital controls, and store all sorts of things. And storage was one of the the big technologies that he talked about, and now you've released this report on long duration storage, which is will play a key role in power grids, going forward.
Maybe let's start this conversation with an explanation of what long duration storage is.
Right. Yeah. That's a good place to start. So when we look at the increase in penetration of variable renewable energy or BRE, So, as you say, solar energy, wind energy, there are going to be longer periods of time when this energy is not available. So when the sun isn't shining and wind isn't blowing.
What that gives rise to are unpredictable periods of time and longer periods of time where energy isn't available from these sources. And so what we'll need to start relying more on in certain key regions of the countries across the globe, energy storage technologies with longer durations to dispatch this energy over this long time frame. That's essentially the crux of long duration energy storage. Now when you might ask a different person in a different part of industry what long duration is, they'll give you a different answer. And at ID TechX, we define this as energy storage with 6 hours duration or longer.
There are different reasons for this, but ultimately, this is when many of the technologies being developed for this application start to become or are cheaper than lithium ion batteries on a dollar per kilowatt hour basis. If you ask the US Department of Energy, they'll say long duration is 10 months. But different stakeholders will say different things. Then starts, you may start asking the question, when does long duration energy storage become seasonal storage? And then start getting into another sort of area there.
So that's, yeah, what I would describe.
Okay. It is seasonal storage, this does it fit within long duration storage, or is it a separate category onto itself?
I think many would say that it's sort of a separate category onto itself. You know, we're looking sort of weeks to months, of storage, duration for that sort of category, whereas long duration was still sort of in the the hours to days mark.
Gotcha. I understand the hours, issue. How many days might we be talking about? A few days a week?
I think, you know, one of the key projects that I've, we've identified with this market report is, a a 12 hour, underground pump hydro system being developed by, a key company in Estonia and LGS hub or, zero terrain. They're also known as and really, we're not really seeing many of these systems being developed for above the 24 hour mark, but there's no reason why they couldn't be. 4 manager developing their system are sort of targeting the 100 hour mark. So so yeah.
Okay. That that jibes with some of the interviews that I've done over the last couple of years. For instance, there was a a startup company in in Eastern Canada that's working on zinc ion.
Yep.
You know? And and so the advantage there of zinc ion, the zinc batteries are are very heavy. They're not gonna ever be in electric vehicles, but they for stationary storage, they might, be very good. They they have this according to this, startup CEO, they had the same performance characteristics as lithium ion. They're about 30, 40% cheaper, and, you know, he he's he foresees a future where you might have, you know, a zinc ion battery in your garage the size of your freezer.
You know? And then and then that's that that becomes part of the the energy management storage system for your house, which then is connected to the grid or the microgrid or, you know, it's this very electrified future that really is, is not that far away. It's getting closer and closer. Okay. So that's long duration storage is 4 to 24 hours, somewhere in there, 6 to 24.
You say it's 6 hours. Others say it's a little bit longer, but we're not talking seasonal storage. That's off the table. Now you this is interesting. I in your report, you talk about how once, wind and solar reach around 45% penetration in a power grid is when 6 plus hours of storage really kicks in.
And, and that tell you why I'm interested in that is that, I was I have a presentation from the International Energy Agency. It's a couple years old now, but it talks about the 6 phases of what you have to do as the percentage of wind and solar increase on your grid. And above phase 2, which is about I'm guessing around 2 to 5%, you really have to begin this re engineering process and storage then becomes a part of it. So my take on this, my assumptions coming into this conversation is that long duration would be needed at a much lower percentage. Am I wrong?
So it depends, of course, on the electrical infrastructure of the country in question as well. There'll be certain regions that might have greater power line, infrastructures already in place. If we're looking at countries that maybe have weaker infrastructure, you're gonna need more of these energy storage assets to to hold that energy, and store it for longer periods of time and dispatch it as and when it's needed. Of course, when we these are still sort of average durations that we're talking about in the sense that, yes, there might be some reasons when they reach 30 percent, VRE may already start needing some of these longer duration assets in certain parts of the country, especially if these systems are being paired with renewable projects, say wind farms or solar farms, to help avoid curtailments of that energy. Otherwise, that energy would have to be transmitted over longer distances.
You then get sort of energy loss, discussions, and it might be more sensible to instead of investing in more power line infrastructure, start investing in energy storage technologies such as, long duration parts.
Yeah. That's a very interesting conversation, and, I had an interview last week when I was in Calgary with Ata Ramon, who is the grid planner for the Alberta Electric System Operator. And we had a he spoke in very general terms. We didn't talk about specific technologies, but, even in a province like that, which is dominated by oil and gas and and, it's a very interesting conversation about how where the energies global energy system is going in that particular jurisdiction. But the the point I'm getting at is that he said, look.
There are so many emerging technologies, and every grid is different. Like, even within Canada where you have, you know, 10 provinces and 3 territories, every province, the the power grid is like a little island. You know, it's like Texas, in ERCOT in Texas where it's it there's not a whole lot of of, energy electricity being traded, yeah, in and out of that that market. And so the grid planners, whether it's a the utility or, in this case, the system operator, tends they they're keeping their fingers on the pulse of the emergence of these new technologies because their particular circumstances will dictate which technologies they then gravitate. And that, I think, is consistent with what you just said about grids around the world.
Right. Yeah. I mean, if we look at the UK in particular, the UK government released a proposal actually, discussing the same sort of thing, about what they're planning to to do. The the proposal focused a lot on, the revision of a cap and floor scheme to provide longer term revenue, certainty for these developers and investors. But there's also a section in there that talks about them not exactly not wanting to establish targets for deployments of these long duration systems yet or for certain technologies, in the in the sort of idea that if they set these targets, this, if too low, could disincentivize players from developing an adequate number of gigawatt hour, bigger of systems.
So it's kind of like a push and pull effect happening at the moment between both regulators and developers to to when these systems will be deployed, when we could expect a larger number of commercial scale systems. Because a lot of them are still sort of, you know, pilot scale, demonstrating scale. You know, it won't really be until we expect anyway of AdiTechX until mid 20 thirties for a lot of these regions where we'd expect long duration to start coming online in certain countries.
Yeah. It's interesting to talk to grid planners about this because one of the things that they're leery of is locking themselves into specific generation technologies or specific storage technologies. Well, any kind of protect tech because it's changing so rapidly that if you invest a lot of money in 1, you know, and and lock yourself into a technology and 2 years later, you know, the next great thing emerges, and you go, oh, we we blew that one. We made a mistake there. We should have waited.
And and so it's it's, I don't envy people like Otto. I I mean, that it's a difficult job at the best of times, making sure that grids are balanced and reliable and and low cost. It's a it's a a difficult technical challenge. And now in a period of rapid technological change, policy change, and, you know, it's that much diff more it's that much more difficult.
Right. Yeah. And I think having a a diverse range of different long duration storage technology will be important for that reason. They all come with their different pros and cons. When we speak to customers, customers will always be talking about cost, but other factors, you know, lifetime of the system, ground trip efficiency, system level, energy density.
These are all really important factors, and there's no perfect long duration in new storage technology. There are multiple and can be categorized in different ways.
Right. Some
of the mechanical storage systems, you know, compress their liquid air systems, could be quite promising, but may suffer from lower round trip efficiency.
Yeah. We'll talk about those in just in just a moment. Before we get to that, I'm interested to see that you're not you're on average, globally, you're expecting long duration storage to really pick up not for, you know, 10 or 15 years, which is interesting. But you do make the point that there are key markets that are adopting wind and solar at a scale at scale quicker than others. Texas, UK, Italy, Australia, India are examples that you you give, and they're expected to do early scale commercial deployment before 2030.
Maybe you could talk about that for a bit.
Yeah. Sure. So there are a few, countries, like you say, Australia, some states in the US, California, Texas, where we'd expect some of the either pilot scale or, demonstration commercial scale products to come online. And so, for example, I mentioned this earlier already, but, Estonian company, an LGISalable zero terrain, planning to install an underground pump hydro system in in Estonia by around 2031. Apex, DAES, are looking to deploy a 16 gigawatt hour diabatic compressed air plant in Texas in 2025.
HydroStore is another plant developing compressed air systems, looking to deploy systems both across California and Australia. And, yeah, so we would expect some of these longer duration systems to be coming online before even the end of this decade. And successful demonstration of those projects is going to really be key to accelerate market adoption, not only in those countries, but globally, around the world.
Right.
Yeah. Yeah.
Yeah. Let's give a shout out to HydroStore, a good Canadian company based out of Toronto, who unfortunately had to go to California to to really begin doing its commercialization, which there's a a trend there, which is grist for another, another episode of Energy Talks, and we'll get into it today. So let's talk about currently, there's a there actually is quite a bit of, energy storage in various grids around the world. And, again, this is, you know, because of the controversies in Alberta that are currently raging around the power grid, I went and compared it to, California. Alberta has a lot of in of industry, so its grid is actually quite big relative to its 5,000,000 people.
It's about half the size, just a little under half the size of California even though its population is, what, maybe 1 eighth. And whereas California had 85 100, megawatts of battery storage, Alberta had a 190, which would seem to be a
little you know, it's a
little bit undersized. So maybe the Californias are kind of out in front. But the point here is, when I was talking, interviewing some of the experts like Ada, about, the advantages of batteries, It's more than just storing electricity. There are issues around voltage and frequency regulation, and and so they play an ancillary role, a very increasingly important ancillary role in the grids. And how how might long duration storage, the 6 plus hours, play into that market?
Yeah. That's a really good question. And this really plays into a wider narrative of some of the challenges that these developers are gonna be facing for generating revenues from providing us with a reception. When we look at things like frequency regulation, voltage regulation, black start, these other sorts of ancillary services, a lot of them can be provided already by shorter duration lithium ion batteries, a 2 hour duration systems. From the research I've looked at from the different regions that I've looked at, a lot of, researchers and and journalists and, regulators are potentially describing ancillary service markets as saturating and and already being provided by this lithium ion battery.
So for that reason, it's very difficult. It might be difficult for long duration systems and and developers and owners of these systems to generate revenues to provide these services if they're already being provided by the consumer. Another point worth addressing, that in some markets, especially in the UK, revenue stacking, so being able to generate revenues from providing multiple ancillary services or providing ancillary services and taking advantage of, trading pulse and electricity is, another key way that owners and and investors can can make their money back, by maximizing the the revenue generation from their asset.
Yeah. The market design is very key here and very interesting. And, again, we're comparing United States to to Canada. Canada is, only has one open holes deregulated wholesale market, and that's in Alberta. Ontario kind of has a weird hybrid system that, you know, really was formed by, politics, but more than rational policy design.
And the rest of the provinces have crown corporations. And it seems to me that market design in some place like Alberta or compared to Crown Corporations in hydro provinces like British Columbia, Manitoba, and Quebec are very different. Because if I'm a utility and I run I I I, I own and run all the generation capacity, I own the the transmission lines. I own the wires into your house. I do look after the retail.
I own the retail system. I have a lot more, control over how long duration storage or how any kind of storage gets integrated into my grid. It's part of my long term integrated resource planning process. Whereas in a market based system, it's very different. The regulator or the system operator is designing the market rules. Sometimes they get it right, and sometimes they get it wrong.
Right. Yeah.
So what any observations there from your your, research?
Well, I think especially in the UK, this proposal that came out from the UK government, is is looking to address this issue of, longer term revenue visibility, a long duration of the storage. And, one of the issues with the capacity market currently is that it doesn't already have cap and floor mechanism. So that's what they're proposing for long duration storage technologies such that if the revenues generated by the asset are above a given cap, then this gets paid back to the consumer and vice versa if they fall below a floor. And that will help these, asset owners ensure they have the guaranteed amount of revenues coming in. So the capacity market is a financial incentive for, generators and storage owners to ensure that they can provide power to the grid at times of peak demand, and they're paid on an annual basis over long term contracts.
And so those long term contracts will help form a big part of this sort of, suppose investment security for investors. So if you win a contract, you're already getting a lot of the payback guaranteed for that system. But there will still, you know, be reliance on other forms of revenue generation, such as trading electricity on wholesale markets and providing auxiliary services potentially. And there also have been calls from some key clients, that we've interviewed specifically to look to redesign capacity market or potentially resource adequacy markets that I know that they're known as in some of the US markets, such that they recognize the other benefits of storage. So such as providing accuracy at lower costs, defying transmission, infrastructure, or or building new structure for transmission lines, etcetera.
So really, it it it's ensuring that there are ways for investors to be guaranteed they'll be getting their money back, and that will help to reduce, that sort of worry.
What about if we're defining, long duration storage as over 6 hours but not seasonal, what role does storage this kind of storage play in, load shifting? Because that seems to be a a a key, you know, especially as we, electrify transportation. You know? So the question becomes, well, when do we charge those batteries in those vehicles? And the I my take on it is that, you know, the sort of 11 PM to 6 AM range is kind of optimal, and that would seem to lend itself really well to the kind of storage you're talking about.
Yeah. Definitely. I think that's definitely one of the key applications that long duration could potentially serve. But you have to think as well, if you're dispatching energy over those sorts of time frames, you're also gonna have to think, is it financially feasible to charge, at times when in the day over the sorts of time frames as well? All those price opportunities going to be price arbitrage opportunities going to be long enough during the day.
And that's ultimately gonna be a question of, is there enough renewable electricity coming onto the grid such that charging costs are not enough? And that that is ultimately the bigger picture, the bigger question. Is there gonna be enough v r e in the day, generating surplus electricity to which long duration could store that energy and then, yeah, discharge that, say, 2 electric vehicles over.
Right. It's a different market in California, say, where they have to curtail, solar power because there's too much of it, compared to other jurisdictions where the, wind and solar make up a relatively small part of the grid. What about I I was going to ask you a question about, the role that long duration storage, might play in other markets and other applications. But maybe we'll we'll go on to, one of your go on to the batteries category. Because one of the reasons this is interesting to me is, there's a redox flow in here.
And I interviewed in an entrepreneur from California last year who said that they're already making 12 hour redox flow batteries, and they can redesign it and expand it, you know, scale it up to to provide 16 hour. And if that seems like it should take care of most of the long duration requirements, But then I talked to somebody else, and they said, well, yes. But the problem with redox is there's there's some they're slower to respond than than, lithium ion, and so that narrows the the range of applications that they have. And what that the my takeaway from that was that all of these different types of chemistries that we're talking about have pluses and minuses. And it looks like we're going to have to scale things up, put them on grids, try them out, and see where they work best in which applications in which geographies and all of that stuff.
We don't know that yet, but we'll figure it out kind of going forward. Is that a fair take on this?
Absolutely. I think redox flow batteries are really interesting, technology, and the market itself is quite different from, a lot of the other sort of emerging electrochemical systems that we're seeing, and of course, the more established lithium ion, of course. When we look at redox flow, you're right. Several different chemistries, the vanadium redox flow battery being the most prominent one, most well known. But then we're also seeing these other sort of other chemistries being developed using potentially low cost materials, such as all ion batteries being developed by ClearPass Inc.
Hydrogen bromine being developed by Lester in the Netherlands, and and so on. And when we look at the amount of redox flow back that have been deployed, the majority of these are vanadium redox flow backings. And, ultimately, what these suffer from are the high cost of vanadium electrolyte. Vanadium is used in other parts of industry reinforcing sort of steel bars for for construction and that sort of thing. Supply of vanadium is limited to certain geographies, and there are only a few companies that are globally responsible for sourcing vanadium.
So it's supply is another key issue. You're right in the sense that scaling the technology, from at least an economic perspective is cheaper because you can decouple the energy and power. If you want to increase the energy of the system or capacity of the system, you increase the size of electrolyte tanks, and electrolyte volumes. And, essentially, that means you can keep the cell stack or power output of the system the same if you want to increase the duration of the system. And that's one of the key advantages over something like lithium ion.
But then there are other sort of technical things you have to think about, dendrite formation, and that sort of thing as well. In certain chemistries, companies have tried to mitigate those with proprietary made through proprietary means. And then there are other electrochemical systems, you know, being developed zinc air systems, ionized systems, other rechargeable zinc, like zinc ion, and that sort of thing as well. A lot of these electrochemical systems really are promising to use of low cost materials, and more abundant materials when we compare them to something like lithium ion. There's a whole another sort of narrative to talk about in terms of securing supply of critical raw materials for lithium ion and therefore relying on other energy storage technologies and not necessarily just long duration that use, say, something like vanadium or iron, or zinc.
A couple of days ago, I interviewed John O'Donnell, who is the CEO of Rondo, Energy. They make the Rondo battery. And I was, you know, not not as an as an engineer or a power grid guy. I I wasn't in position to critique it, but, boy, it sure sounded interesting. And, essentially, for anybody who hasn't listened to the the episode with John yet, they figured out they've taken 200 year old technology that was developed in Britain, for, the steel industry there, where, basically, you know, you have coal providing heat, but you have to you have to make it, you have to if make it more efficient, and you have to make it a smoother what am I trying to say here?
You know, it has to be the heat has to be more even than than what you would get just out of burning the coal. Oh, boy, did I do a bad job of explaining that. But the point is they've they've figured out a way to use bricks very similar to what they used in Britain and to heat them up using low cost wind and solar, and then they can either provide heat directly to an industrial process or they can run water through it and provide steam. And and he was making, of course, as you would imagine, very strong claims for what the system could do, but it sounded terrific. And I thought, you know what?
You can't be the only one that's doing this. So give us your take on
Yeah.
Sort of high temperature, systems like Rondo Batters.
Absolutely. Thermal energy storage is a really interesting sort of market and technology. And in fact, it's something that we've looked into specifically for providing decarbonized industrial heat. So as you say, these technologies can be described as quite versatile. They can either be used to supply heat directly to a process.
This could be through, say, steam or hot air. There are other technologies being developed that look to provide heat directly through radiative heat transfer rather than through, exchanging heat through through hot and cold transfer heat transfer fluid. And they can also be used to supply electricity, as you say. And there are some players, like you say, Ron, though, that may be part of the long duration storage council, and in some cases, may look to deploy these these long duration, these systems for long duration only storage applications. But when you then start to consider pairing a turbine generator on the discharge side of the system, so you say you have your hot steam or your hot air going through this this, turbine to drive generator, what happens is the round trip efficiency of the system drops from anywhere to 40 to 60%.
And so it really makes more sense technically, economically, to use heat batteries, thermal energy storage systems, that otherwise described to deliver heat to industrial heating processes. That's not to say that that's all they'll be useful. There are some new scenarios where they could definitely be used for long duration applications. It is, you know, a question of, again, materials used. Like you say, we see one day using brick, but other players using concrete, molten salts.
There are other latent heat systems being developed. It's a really yeah. I'd say interesting technology. But I think we'll see a lot of these being used to decarbonize industrial heating processes. And that's its own sort of problem within our global sort of space, for sure.
Right. And and in fairness to John, I mean, that was the application that Rondo is is targeting as opposed to electricity generation. And your point about, energy loss, running it through all of the different processes to turn to store electricity and then turn it back into electricity and why that may not, may not work. But let's talk about mechanical storage. And compressed air because I've I've done a couple of interviews with hydro stores of interest to me, but I also had to wonder, you know, they they they they dig out their caverns.
They bore into their their caverns into into granite. I mean, into into, you know, bedrock, and that's gotta be expensive. Then you have to pump you use the the cheap solar, let's say, to pump air underground, then you release it through a turbine to create electricity, and it seems to suffer from the same kind of energy loss that you just described that would plague a a Rondo battery. Am I right or wrong on that? No.
That's correct. You know, when we look at compressed air systems and liquid energy storage system, these again fall in the round trip efficiency category of 50 to 55%. And when we look to expand the air on the discharge side, natural gas might be used to help provide that heat of expansion. So you also might have emissions relate, released from the system as well, which brings its own environmental concerns. So yes, that is something to consider.
But as you say, you may look to dig new sources, of of space underground to store this, but then there may be some also coal mines, that sort of thing, which can help reduce costs. But then these companies have also said that by doing that, you're creating more risk for the project over its lifetime. You might not know how stable that cabin might be. But, really, it's gonna be a mixture of different systems that we'll see. And maybe just to to circle back to thermal energy storage, one of the really niche applications that we might start seeing in future is, especially, say, the liquid and storage systems.
It follows a similar principle, but it it looks to liquefy the air rather than compress it. When we instead of using natural gas to provide the air expansion, what you could use is a thermal storage battery, to provide that heat instead. And so you remove the emissions released from the system to create what's called an adiabatic system, and that will help to increase the overall range of efficiency of of a liquid energy storage plus thermal storage system. And, really, that that sort of application brings another advantage of thermal energy storage and will help to improve the sort of, I guess, attractiveness of liquid air and potentially compress that in storage systems. But it's not something we're seeing much of at the moment.
Okay. I wanna introduce, this is not an energy storage technology, but it's I think it's a principle that that that is is related to this. And I'll refer to a an energy talks podcast episode I posted this morning. My interview yesterday with professor, Darwin Farmer, from the Santa Fe Institute and from Oxford, and he deals in complexity theory. And and one of the things we talked about was why wind and solar are getting so cheap.
And the the point here is that energy as a technology is very different than historically we've had energy as a commodity. And so now it energy essentially is influenced by the laws of electronics manufacturing, not by, you know, markets and the cost of digging stuff up and shipping it someplace. And what that means is in if we are we could probably now see the line of sight to electricity that has a marginal cost of 0. It's getting so, so cheap. If we get there, it's it's not guaranteed yet that we're gonna get there.
But let's assume that we can get there or pretty close to it. Does that change the calculations for any of these technologies?
It's definitely interesting, what you've brought up because we've in in particular European countries have seen negative electricity prices over the last couple of years in some cases. And that's, you know, where there's so much electricity. It actually is a burden on the transmission system operator to know what to do with that electricity and where to put it. And that's just because of that oversupply. And that could be, yes, deterrent to potentially development of these technologies.
But it's not really, a trend per se yet. I would say it's something that we've seen a few instances of, you know, over a few key instances in certain countries.
Here's another question for you, and, this is again came up in the Alberta context because Alberta's, is a very unique power grid in that consumers are only about 16 to 20% of the demand. The rest is I think it's about 50% is industrial, you know, petrochemical plants and refineries, the northern the oil sands, industry. And then there's another 25, 30 percent that's big commercial, and then the rest is residential and some farming. And what that means is, there's a lot of discussion about whether big industrial customers that are on the grid now are soon going to be in a position where they can self generate their own electricity, store their own electricity, and either provide for their own needs and essentially almost unplug from the grid, and or if they wanna sell back into the grid, you know, kind of in an arbitrage, process. And I'm wondering the extent to which long duration storage might fit very neatly into that business model.
Yeah. So this is specifically regarding, sort of commercial and industrial customers?
Yes. So if they decide to self generate on-site, so you they're building their own solar farm, let's say. Yep. And and then they want storage. They had to have to have storage.
And so it's one thing to have a, you know, 4 hour lithium ion battery system and quite another to have a 12 hour to 16 hour redox flow battery. Do they work together? Do you have a combination, a hybrid system? Do you you know, does the fact that you have long duration storage as an emerging technology, does that then open up more opportunities for for that particular type of business model? I I'm just throwing it out there for discussion.
Sure. So I think it definitely could be for some of the other electric chemical systems that we're we're looking at seeing developed. So some of the zinc iron air systems. And, like I said, potentially, for the thermal energy storage, technologies, if customers can optimize both electricity and heat usage, then that can be seen as a bus stop technology as a win. When we look at system of the mechanical systems, that I think start become less feasible, and that's simply because a lot of these systems are built at massive scale.
You need, as you say, compress the underground infrastructure. If we're looking at gravitational systems, this might also be underground structure or because of the low energy density of the technology, you might have to build these sort of skyscraper like structures, which on an industrial side, it's simply unbeatable to build. The customers don't have that sort of space. And and so energy density does start to become a bit more of an important factor there where some of the mechanical systems have to see a downside. But I think customers are deaf and and industrial, users are definitely looking to optimize electricity usage, trying to find systems that will fit into tight manufacturing environments, and and and that is something that we're noticing as well for sure.
Yeah.
Well, this has been a fascinating conversation, Conrad, because this is, the storage at scale and at an affordable cost is fairly recent. And I know people see thinking hasn't caught up to it yet because I I get assailed all the time by claims that, you know, you have to have like, in Alberta, for instance, you know, you have to if you have a megawatt of of wind or or solar generating capacity, there has to be a megawatt of natural gas generating capacity as backup. You know, these which is not true. It's absolutely not true. But, you know, the premier of the province was saying that, And so it's influential, and it gets around, and it just you know?
But my takeaway from our conversation is that there is a plethora of long duration storage technologies. They're all out being developed and tested, and they're in various stages of, you know, pilot projects, commercial projects, demonstration projects that will probably my guess would be over the next 2 to 5 years, we'll see some of them fall by the wayside. Some of them will will turn out to be economic and will begin to scale up at so is it fair to say then, and I guess your report did say it, that between, you know, around the late 20 twenties, we're really gonna see some of these technologies begin to take off in key markets like California, Texas, UK, India, and so on, and then the others will kind of catch up in the 20 thirties, between 2030 and 2040. Is that a fair summary of where we're at?
I I think maybe slightly delayed, beyond that. So I think, really a lot of the type of will be mid thirties. Maybe early thirties for Germany and California, but then mid thirties, late 20 mid mid thirties, late 20 thirties for for most of these places. And then, yes, 20 forties is then where we're starting other countries, really have the demand for these technologies. And it really all comes back down to how much of your electricity being generated on your grid comes from variable renewable energy.
You know, you look at China, South Korea, Japan. Yes. They have increasing variable renewable energy, but they still have a lot of base load generation that comes from, say, coal or nuclear, which provides predictable, unreliable energy generation. So it all comes back down to how much of it come of your electricity generation comes from from.
You just mentioned China, and I think that's the first time the, China's come up in our conversation.
Right.
And, we would be remiss if we didn't talk about that because Right. Amount of renewables, particularly solar, that China is in the process of building is stunning, and I've done other episodes on this. But just as an example, in the Mongolian desert, China plans to build 255 huge solar farms. I mean, that's mind boggling, the amount of the of capacity that they're bringing into their system. Yes.
They have coal backup. That's the whole point of them building as many plants as they are now is they're going to wean themselves slowly, slowly off coal, but the coal they'll have a capacity market, and the coal will be sit there idle if necessary, but it'll be there as backup if, you know, the wind doesn't blow and the sun doesn't shine and the water Yep. Drops in the reservoirs and etcetera, etcetera. If they if they need it, they'll they'll have it. So what role do you think that long duration storage and storage in general might play in that changing China Chinese power grid?
Right. It's a very good question. And so when we look at the data, we go through the same sort of process for each country. The demand for long duration on these storage technologies in China will really not be that prevalent or as prevalent as in other countries is what we see. And that's again because it comes down to that figure that, you talked about at the start of this this chart was at 45% of your electricity generated from BRE.
When you reach that point around there, you'll need an average duration of around 6 hours. And quite frankly, when we look at what that's projected to look like in China, compared to the amount of, fossil fuel based sources generating electricity or or non variable, I should say, non variable renewable energy generation, it's not gonna reach that sort of that sort of level, potentially even until the 20 forties. At least looking now from projections, of course, this could change. We also see that they have something like 1.2 terawatts of renewable capacities being targeted to be installed by 2030. But it's all about, yeah, what percentage of the energy generated comes from variable renewable energy.
And for China, it's not as high as, say, US, certain US states and Germany, for instance.
Fascinating. And, thank you very much for that observation on China. I think that, in fact, no one will hear this before the event takes place probably, but we have an event tonight, where we're going to be talking about the role of China in the energy transition. And given the fact that they're adopting, solar on such a massive scale, you know, what does that do to the price of solar, and and what does it do to their to to how does it give them a competitive advantage in things like manufacturing batteries and manufacturing? You know, if China gets to the marginal cost of 0 of electricity sooner than everybody else, then that becomes a competitive advantage, and those sorts of questions.
And so your observations about when they might or might not, adopt long duration storage kind of fits nicely into that issue that we're gonna be discussing, so thank you for that. Well, Conrad, this has been great. I I really I learned a lot today, and that's always, that's a sign of a good interview. So thank you very much for this.
Great. Thanks for having me. Really appreciate it. It's been great. Thanks.